Coca-Cola planning to jump into non-dairy milk market?

South America’s biggest non-dairy drink brand is being sold to Coca-Cola for $575 million (€515 million), a move which makes Coca-Cola the biggest player in South America in non-dairy milks and provides it with a platform from which to enter other markets.

The Ades brand was first launched back in 1988 and acquired by Unilever in 1998. A soy-based non-dairy drink, it has a more than 30% share of the Brazilian market, where it is sold in a wide range of formats. Its most successful variant is a blend of soy milk with fruit juice. The brand is also sold in Argentina, Mexico and five other South American countries.

Unilever, which is selling the brand to Coca-Cola, says that Ades generated net sales of $284 million (€254 million) in 2015. Other sources have claimed that the real sales number is higher – more than €300 million.

After an abortive attempt to launch Ades in Europe about ten years ago, Ades seems to have marked time under Unilever’s ownership.

Undoubtedly, with the surge in sales of non-dairy milks – led by almond milk – that is taking place in Europe, the US and Australia, Coca-Cola sees an opportunity to take an established non-dairy milk brand and take it to new markets and add new types – such as almond and other nut milks. Ades also has the potential benefit of a “cool factor” from its Brazilian identity.

In the US, non-dairy milks already account for 12% of the liquid milk market, despite selling at a 100% premium to regular cows’ milk and despite falling short on nutritional values (unless the products are heavily fortified). US sales grew 30% in 2015. Even in Germany and the UK, sales of non-dairy milks were up by 30% in 2015 and it’s a similar story in Australia.

Companies around the world are watching the “non-dairy dairy” market’s phenomenal growth and the surging sales not only of non-dairy milks, but non-dairy yoghurts and desserts, and wondering how they can take part. With a payment of $575 million, Coca-Cola may have just bought a seat at the table.